DSC1630 Assignment 1 Semester 1 |ELABORATE ANSWERS| - DUE 13 MARCH 2026

DSC1630
Assignment 1

Semester 1
DUE: 13 MARCH 2026

, DSC1630 ASSIGNMENT 1

SEMESTER 01, 2026

Introductory Financial Mathematics


Student Name: _________________________________

Student Number: _________________________________

Submission Date: _________________________________


IMPORTANT: This assignment must be submitted online via myModules before 13 March
2026, 23:00. Ensure all calculations show full working and final answers are rounded as
specified.

, QUESTION 1
Problem Statement:

Hassim deposits R900 into a savings account paying 6.5% interest per year, compounded
quarterly. After three and a half years he withdraws R1,000 from the account and deposits it into
a second account paying 11% simple interest per year. How much is the total amount accrued
in the first account two years after withdrawing the R1,000?

Solution:
Calculate the amount in the account after 3.5 years

Given:

• P = R900 (initial deposit)
• j₄ = 6.5% per year (compounded quarterly)
• m = 4 (quarterly compounding)
• t = 3.5 years
• n = tm = 3.5 × 4 = 14 periods

Formula: S = P(1 + j_m/m)^(tm)

S = 900(1 + 0.065/4)^14

S = 900(1.01625)^14

S = 900 × 1.251626

S = R1,126.46

Calculate balance after withdrawal

Balance remaining = R1,126.46 - R1,000 = R126.46

Calculate the amount 2 years after withdrawal

Given:

• P = R126.46
• j₄ = 6.5% per year (same rate)
• t = 2 years
• n = 2 × 4 = 8 periods